Which of the following gives rise to a negative externality?
A) Sudden increase in the price of wheat due to a fall in supply
B) Sudden increase in the demand for diamonds leading to an increase in their price
C) Deforestation leading to the extinction of many species
D) Globalization leading to creation of many new job opportunities
C
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Halibut tends to be much more expensive than cod. According to the economic way of thinking, relatively high halibut prices can be explained by
A) using the theory of supply and demand. B) pointing out the cause—Halibut boats are often more expensive than boats used to fish for cod. C) acknowledging the price differential is unfair to consumers of halibut. D) acknowledging the price differential is unfair to cod fishermen.
What would happen to the budget line if income as well as prices of both goods increase by the same percentage?
A. A rightward parallel shift in the budget line B. A leftward parallel shift in the budget line C. A rightward shift in the budget line D. No shift in the budget line
The U.S. government has two different methods to deal with illegal drug use. First, the government has tried a "war on drugs", with the idea of keeping illegal drugs out of the country
Second, the "Just say no" campaign has been used to make individuals more aware of the harmful effects of drugs. Use supply and demand to analyze the effects of these two separate policies.
Real GDP can rise at the same time money supply falls if: a. velocity rises rapidly enough
b. velocity falls rapidly enough. c. the price level rises rapidly enough. d. either b. or c. occurs.